Brown pleads guilty to fraud, campaign violation

WASHINGTON – The former chairman of the District of Columbia Council pleaded guilty Friday to lying about his income on bank loan applications, the latest blow to a city government rocked by scandal.

Kwame Brown also admitted to a misdemeanor campaign finance violation, capping a tumultuous week in which he forfeited his position as one of the city’s most influential powerbrokers. His departure creates more turnover on the city’s governing body and follows the resignation of another councilmember who admitted to stealing public funds earmarked for youth sports programs.

Their departures this year – coupled with a federal probe of Mayor Vincent Gray’s 2010 campaign that has already produced guilty pleas from two campaign aides – have sent the district government into a tailspin. And the scandals likely aren’t helping efforts to gain greater budget autonomy, much less win more voting power for the district’s delegate to Congress or to secure the long-sought goal of statehood.

“Whatever it’s resignations, investigations, whatever it is – I think it’s had a very bad effect,” said Councilmember Mary Cheh, now the panel’s acting chairwoman. “People are feeling demoralized, I think they’re feeling disappointed.”

In the District of Columbia, where the governing body has only 13 members, effectively functions as a state legislature and operates less than three blocks from the White House, cases against corrupt public officials take on heightened significance.

“They are not entitled to break the law without repercussions,” said Ronald Hosko, the special agent in charge of the criminal division of the FBI’s Washington field office.

Long-running investigations that have raised anxiety in the city government complex have yielded major developments in the last six months.

The latest occurred Friday when Brown, who resigned hours after being charged this week, pleaded guilty to falsifying his income by tens of thousands of dollars on applications to gain a home equity loan and for funds to buy a 40-foot speedboat. Some of his paperwork was sent from his council office.

Prosecutors say one of the loans has been paid off and Brown is current on payments on the other.

He also pleaded guilty Friday to a campaign finance violation stemming from an unreported side bank account opened by a relative during his 2008 campaign.

Both the bank fraud and campaign finance charge carry up to six months in prison under terms agreed to by both sides.

Brown appeared by turns apologetic and defiant as he addressed reporters, noting that prosecutors had not charged him with stealing or misusing any campaign funds despite a long-running federal investigation. An audit last year discovered more than $270,000 in unreported campaign contributions and expenditures and that about $239,000 had been received by a consulting firm operated by his brother.

He choked up as he apologized to his family and the public.

“It has been a long and difficult journey,” he said. “Today, I am taking the first step in regaining the trust of the people I love and serve.”

U.S. Attorney Ron Machen said the fraud was discovered as authorities pursued campaign improprieties. Though the more serious charge against Brown didn’t involve his professional duties, his resignation was a condition of the plea agreement.

“How would you feel if we left him in office and greater fraud was perpetrated (against the public) down the road,” Machen said.

The charges come five months after another councilmember, Harry Thomas Jr., resigned and pleaded guilty to embezzling more than $350,000 in government funds earmarked for youth sports and arts. He was sentenced to more than three years in prison.

Last month, two former Gray campaign aides pleaded guilty to charges arising from the 2010 mayoral race. One aide admitted lying to the FBI about straw donations to a minor candidate in the race. The other aide admitted funneling money and destroying evidence of the transactions. The payments were intended to keep the candidate, Sulaimon Brown, in the race so he could continue assailing then-Mayor Adrian Fenty as he sought reelection.

Sulaimon Brown told The Washington Post he had been paid and offered a job if Gray won. The statements, made two months into Gray’s tenure, prompted an investigation that continues. Gray has denied wrongdoing and has not been directly implicated.

There’s nothing new about political scandals in the capital city. Marion Barry drew national attention when, as mayor, he was caught on video smoking crack. He served six months in prison but staged a comeback, winning a fourth term as mayor and holding onto a Council seat despite other legal troubles.

The latest allegations come at a delicate time for the city, as statehood advocates lobby Congress for more autonomy on fiscal affairs. Although district residents were given the freedom to elect a mayor and Council in 1973, Congress has the final say over the district’s budget and laws.

Nick Jeffress, executive director of the D.C. Republican Committee, said the scandals should make voters think hard about electing honest leaders who will have the clout and respect to push the statehood cause.

“We need to have that at the forefront of our minds – who are we electing and what sort of baggage might they bring,” Jeffress said.

Council members will meet next week to select an interim chair from among four at-large members. Cheh said the city government is still functioning and officials will work to win back trust.

But, she noted, “This is a stain on the government.”

Learn more about the timeline of D.C.’s troubled political past here, and view the charging documents filed against Kwame Brown here.